The Juneau Assembly on Monday decided to charge cruise lines $1.73 per passenger for port projects, but the issue of financing future port development isn't settled completely.
The Assembly has been in discussions with the cruise industry for months about how to pay for port improvements. Until Jan. 1, cruise ships paid a tonnage fee. As a replacement, some Assembly members preferred to negotiate with the cruise lines on a project-by-project basis.
Assembly member Jeannie Johnson, who proposed the new passenger fee, said it was a compromise between a tonnage fee and a project agreement.
"It's a middle way as far as I'm concerned to try to get more people to agree," she said.
The $1.73 passenger fee would take effect May 15 and expire Dec. 31, 2005. The fee would apply to the 15 ships that will visit between April 30 and May 14, but wording to make it retroactive could be challenged by the cruise industry, City Attorney John Corso said. In the first year, the fee should generate about $1.2 million. Last year, the city collected $1.7 million in tonnage fees.
By the terms of Monday's resolution, the cruise industry would contribute about $4 million over four years to the first phase of the Marine Park-Steamship Wharf redesign project, or 75 percent of the cost. Passenger fees would be placed in a port development fund and the city would issue revenue bonds.
The city's port development fee
Cruise lines would pay $1.73 per passenger through Dec. 31, 2005, to fund port projects in Juneau.
The fee would take effect May 15, but may apply to 15 ships that visit between April 30 and May 14.
The city will consult with the cruise industry on planning and spending.
Specifically, the fund would be used to pay 75 percent of the first phase of Marine Park-Steamship Wharf redesign and the design for the second phase. It also will cover half the cost of a comprehensive waterfront plan, a feasibility study and design for a dock extension and other projects the Assembly selects.
The $1.73 fee also would pay for the second phase of the Marine Park-Steamship Wharf redesign, half of the cost of a comprehensive waterfront plan, a study and preliminary design for a dock extension and other projects selected by the Assembly.
The Marine Park-Steamship Wharf project would add bus staging, green space and pedestrian improvements to a section of Juneau's downtown waterfront. Juneau already charges cruise ship passengers $5 a visit, money that goes to reduce visitor industry impacts.
North West CruiseShip Association President John Hansen said cruise lines need a chance to review and discuss the resolution in detail.
"We're certainly still in the view we want to work with the Assembly, the city and borough, on a project-based agreement," he said. "I haven't seen the final resolution that was passed, but I think it goes in that direction. It does reference some specific projects, including a waterfront park and waterfront planning project."
Whether the city charges a fee based on a ship's length or number of passengers doesn't matter as long as the revenues go to a specific project instead of into general revenues, he said. If an agreement is reached, the NWCA is interested in finding a way for all ships to contribute, including those that visited in the first days of the season, he said.
Assembly member Randy Wanamaker moved to reconsider the resolution so it likely will come back to the Assembly for a future vote. He would like city management to continue pursuing a project agreement with cruise lines, he said.
In earlier discussions, the North West CruiseShip Association proposed contributing $3.6 million for the Marine Park-Steamship Wharf project with the city paying $1.5 million.
Johnson said she couldn't vote to lock the city into the $3.6 million offer, which is why she proposed an alternative, with assistance from Mayor Sally Smith.
"I don't think anywhere we agreed to accept that offer," Johnson said. "To me, this is going back with our offer, and as it stands now, that's what's going to happen."
The passenger fee proposal drew fire from Assembly member Dale Anderson, a proponent of project agreements with the cruise industry.
"Partners talk, partners have input," he said. "They haven't had an opportunity to give input. I think it's a slam to the industry. An absolute slam."
Assembly member Don Etheridge said the passenger fee strains the city's relationship and credibility with the cruise industry.
"It doesn't sound like a counter offer, it sets it in stone," he said. "We started leading the cruise industry down this golden path and now we're shutting the door. And that's real heartburn for me."
But Assembly member Jim Powell said the passenger fee runs a middle line.
"The tonnage fee served us well over the past several years. It wasn't project-specific, but the money did go to (port) projects and it was responsibly spent," he said. "Are we working with the industry? Yes. And I think that's good."
The city expects the first phase of the Marine Park-Steamship Wharf redesign project will cost $5.4 million. If the low bid exceeds 110 percent of the engineer's estimate, the city will enter additional consultations with the cruise industry. In general, the resolution calls on the city to consult with cruise lines on port planning and project spending.
The $1.73 passenger fee was approved by the Assembly in a 6-3 vote. Wanamaker, Johnson, Powell, Smith, Frankie Pillifant and Marc Wheeler voted yes. Anderson, Etheridge and Ken Koelsch voted no.
Joanna Markell can be reached at firstname.lastname@example.org.
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